It’s important to know when to use your homeowner’s insurance. Relying on insurance to cover expensive losses can lead to significant savings for you, but filing a home insurance claim can hurt you. For example, when you make a billing, the premium could increase when your policy is updated. In this guide, Bankrate’s insurance editorial team considers it’s best to file a home insurance claim.
What is a homeowner insurance claim?
By submitting a home insurance claim, you will begin the process of being refunded for losses covered in your home or your property. You can usually send a bill in several ways. On the phone, directly with your agent, via an online account, or using the mobile app (if you have a company). This process can vary from one insurer to another, so be familiar with your insurance company’s options by talking to an agent or checking online.
File a homeowner’s insurance claim under the right circumstances can help you better manage your significant losses and avoid paying too much hard-earned money.
When to file a home insurance claim
Any damages incurred on your property do not automatically mean that you should file a claim against your homeowner’s insurance contract. To determine whether filing a claim is the best course for you in the long run, you need to consider the following factors:
The estimate exceeds the deduction
The cost to repair damage to your home or replace damaged household items is Significantly It probably makes sense to file a claim as it is higher than a deductible policy. However, only total cost is Slightly It’s more expensive than the deductible, so we recommend considering paying these costs yourself. This is why.
Whenever a claim is filed, it is reported to a comprehensive loss underwriting exchange (clue) used by database insurers across the country to track claim activity. All carriers will review this database and billing may increase premiums with the next policy update. And repeat claims – even those who pay less insurance can hide your insurance company. Frequent or recurring claims may only qualify for high-risk homeowner insurance, but this is more expensive.
Damage is covered and extensive
Homeowner insurance is not intended to cover daily maintenance or minor repair costs. It is designed to cover important, unexpected, and sometimes catastrophic losses. These are the events that generate claims. For example, hurricane wind damage and home fires often result in widespread damage and are usually the right catalyst for filing a claim.
There is support for damage
Authorization is add-on coverage and provides financial protection against things that standard home insurance does not normally cover. Authorization can even extend coverage limits beyond what standard policies offer. These “add-ons” increase premiums, sometimes only slightly, and may come with a different deduction.
Jewelry coverage and sewer backup are two approvals that are commonly added to homeowner policies. If damages incurred are covered by approval, it may make sense to file a claim as these are usually costly repairs.
If you do not submit a home insurance claim
As mentioned above, there are many situations where filing a homeowner’s insurance claim may not be in your greatest interest. In these situations, if possible, you can save premiums and prevent more serious problems with future coverage, you can repair damages or pay the cost to replace the items yourself.
Damage is minimal
Even very minor things can lead to an increase in your home’s premiums. The insurance company may refuse repairs or replacement costs below the deduction amount. As insurance companies don’t cover most of the claims, claims with slightly higher repair costs than deductibles should probably be avoided, as they risk increasing premiums.
Your policy excludes damages
You don’t want to face problems by submitting an assertion that you are quite certain. Even claims that are denied or have a $0 payment are reported to have clues, which could negatively affect the premiums you pay in the future.
Filening a homeowner’s insurance claim is not a “nothing to lose” proposal. Consider investigating insurance contract exclusions and, if possible, seeking advice from an insurance agent before filing a suspicious claim.
Damage is normal wear and tear
Homeowner insurance consistently includes a “failure to maintain” exclusion that gives carriers the right to reject a claim based on a burden or lack of maintenance. For example, if you have a roof with serious damage and leakage due to the failure to replace the shingles that led to greater problems, your carrier could deny your claim.
There are some recent claims
File a series of claims within a relatively short time frame can raise eyebrows with the underwriter and lead to non-renewal of interest rates and insurance contracts. A homeowner who has multiple claims on the record may assume that another claim will likely be filed with the carrier. This is part of the risk assessment that we use to determine whether the policy needs to be updated and whether the rate should be changed. If the insurance company determines you have an excessive level of claims activity, even a rejected claim can be considered a negative factor.
How to submit a home insurance claim
It is important to understand how to file a home insurance claim. The diligence employed in preparing and supporting your claims can affect the chances of a full recovery. This process requires a deliberate step-by-step approach.
- Please contact your homeowner’s insurance company or agent as soon as possible and carefully fill out and submit the required claim form.
- Collect all documents that support your claim, including photos and all receipts for your expenditure. Having a completed, latest home inventory makes this process easier.
- Do some immediate temporary repairs, especially if these minimize additional damage, such as leaky roofs. Perhaps if your claim is approved, you will likely be refunded for these items, so keep receipts with receipts of materials that need to be purchased, such as buckets and tarps.
- Prepare for your visit with the assigned claim field adjuster and answer all your questions honestly and thoroughly.
- Get a replacement, repair or rebuild estimate from a reputable contractor. Working with contractors in your provider’s “network” can speed up the claim process, especially if you require a supplemental damage claim.
It is beneficial to initially set up an insurance policy with a homeowner insurance company with positive reviews for claim experience, and can improve the odds of having good experience when filing a claim.
Alternatives to submit a home insurance claim
In many cases, there is an alternative to filing a home insurance claim, which can help reduce the premium. Please note that the average cost of homeowner insurance in the US is $2,267 with housing coverage of $300,000. However, the rate may be higher, especially if you filed a claim in the past. If your home is damaged and you want to avoid claims, consider the following strategies:
- Pay from your pocket: This is best when the claim is made for amounts below deductible amounts.
- Use the home warranty: If the damage is one of your home’s systems (such as plumbing or electricity) and you have a home warranty, you can benefit from relying on warranty coverage first.
- Use emergency funds: If you can, building emergency funds over time can provide important resources in the event of damage to your home.
- Negotiate with the contractor: For example, you may be able to pay in cash or bundle multiple repairs with one contractor, and you may be able to earn some discounts.
